CREDIT UPDATE: EUR Market Wrap
Feb-16 12:20
- Bunds are ~3bps cheaper across the curve with our DM team flagging firmer-than-expected UK retail sales and hawkish Fed-speak overnight continue to weigh on wider global core FI while Schnabel's prepared remarks were cautious, re-iterating that low productivity may delay inflation returning to target.
- Main/XO are -1bp/-4bp with XO back to year-end levels and Main now -2.4bp YTD. FICM is showing €IG/€HY at -0.5bp/-3bp with all sectors in the green.
- SXXP is +0.6% with Basic Resources the notable outperformer at close to 3%, bringing YTD performance to -7% and making Utilities the worst performing sub-index at -8.8%.
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EUROZONE ISSUANCE: DSTA Q1 calendar update
Jan-17 12:20
The DSTA has announced the following calendar update:
- The 15-year 0% Jan-38 DSL (ISIN: NL0015000B11) will be reopened for E1.5-2.5bln on 23 January.
- The new 10-year Jul-34 will launch via DDA for E4-6bln on Tuesday 6 February. The coupon will be announced on Friday 2 February with initial spread guidance on Monday 5 February.
- There will be 3 other auctions in the quarter, but the order hasn't been confirmed yet. On offer will be:
- A reopening of the 2.50% Jan-30 DSL (ISIN: NL0015001DQ7)
- A reopening of the 3.25% Jan-44 Green DSL (ISIN: NL0015001RG8)
- A reopening of another existing DSL (still TBC)
- The dates for the rest of the quarter have been confirmed as 27 February, 12 March and 26 March.
OUTLOOK: Price Signal Summary - Bear Cycle In Gilts Extends
Jan-17 12:11
- In the FI space, Bund futures traded lower yesterday, resuming the bear phase. This strengthens the current downtrend and reinforces the short-term importance of the recent break below the 20-day EMA. Sights are on key support at the Dec 8 low of 134.37. A break of this level would open 133.42, the Dec 4 low. Initial resistance is at 135.80, the 20-day EMA. A clear break of the EMA is required to ease bearish pressure.
- Gilt futures gapped lower today and cleared support at 99.60, Jan 5 low. This reinforces a bearish theme and confirms a resumption of the downtrend that started Dec 27. The contract has also traded through support at 97.97, the Dec 6 high signalling scope for an extension towards 97.39, the Dec 11 low. On the upside, resistance to watch is at 100.56, the 20-day EMA. A clear break of the average would ease bearish pressure.
SONIA: SONIA FIX - 17/01/24
Jan-17 12:09
SONIA FIX - ICE/Bloomberg:
- TISONI1M 5.1979 0.0042
- TISONI3M 5.2097 0.0159
- TISONI6M 5.1525 0.0465
- TISONI1Y 4.8388 0.0950
